Ch07 adj Werner Jones Mgt Acctg PP97 2003

2 it must differ between decision alternatives 2009

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Unformatted text preview: future cost. 2. It must differ between decision alternatives. ©2009 Michael Werner and Kumen Jones, Introduction to Management Accounting, 3e Werner/Jones 7 ­ 3 LO1 Relevant Costs and Benefits • A relevant benefit is a benefit relevant (revenue or cash inflow) that is pertinent to a particular business decision. • A relevant benefit is a future benefit relevant that differs between alternatives. ©2009 Michael Werner and Kumen Jones, Introduction to Management Accounting, 3e Werner/Jones 7 ­ 4 Sunk Costs LO2 Explain why sunk costs and costs that do not differ between alternatives are irrelevant costs. • Expenditures that have already occurred Expenditures and cannot be changed by current or future actions are called sunk costs. ©2009 Michael Werner and Kumen Jones, Introduction to Management Accounting, 3e Werner/Jones 7 ­ 5 LO2 Irrelevant Information • Irrelevant information possesses Irrelevant either of the following qualities: 1. It is a sunk cost or revenue. 2. It does no...
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This note was uploaded on 03/16/2014 for the course ACC 212 taught by Professor Quintanna during the Spring '08 term at University of Miami.

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